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'Five sectors may see margin expansion in 2023'
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IANS | 05 Jan, 2023
Companies in cement, automobile, consumers and specialty chemicals might
see margin expansion in 2023, said Motilal Oswal Asset Management
Company (MOAMC).
While inflation does seem to have peaked in 2022, central bankers are not letting their guard down.
While
the increase in policy rates has slowed down, central bankers are now
expected to keep rates high for longer and the peak rate could be a tad
higher, vs earlier expectations, MOAMC said in a report.
According
to the report, the equity markets which had been buoyant in November
2022, on hopes of a policy pivot, gave away some of their gains and
consolidated. Covid fears resurfaced on spike in China.
"Cement, consumers, specialty chemicals, and autos might see margin expansion in 2023," said MOAMC.
The
Indian cement industry could add 80-100 million tonnes of capacity by
FY25, driven by increased spending on housing and infrastructure.
Citing
the long term growth potential of India, MOAMC said Indian cement
companies are favorably positioned to deliver building solutions for the
nation on the march. The three main demand drivers for the cement
industry: infrastructure upgrades, rural housing, and urbanisation.
As
regards to the consumers segment, the E-commerce continued to grow
with more people shopping online; consumers continued to prefer products
that enhanced their health and well-being.
Traditionally,
low-cost labour and readily available raw material provided an edge to
Indian specialty chemical manufacturing companies.
Not being content with this advantage, the companies are now focusing on product development capabilities.
The
Indian chemicals industry has increased its capital expenditure over
the past decade in order to be well-equipped to capture future
opportunities.
The automobiles sector will be driven by rural
demand for those players with strong rural and semi-urban presence.
Demand in urban regions continues to remain buoyant. Improvement in
sales is to continue, driven by an expected rise in e-commerce,
agriculture, infrastructure, and mining activities. Many Auto companies
expect recovery to continue over the next few years, driven by improved
economic activities, an affordable interest rate regime, and better
financing availability, said MOAMC.
Amongst other spaces, tyre companies and auto ancillaries could see margin expansion.
During
Q2FY23, banks dominated profit delivery. Now with deposit growth
picking up, and with system liquidity improving, a higher growth rate
can sustain for longer aided by a money multiplier. Most banks are
comfortable with provisions and hence the non-performinng assets (NPA)
are expected to not hurt. Government banks could see a sharper increase
in net interest margin (NIM).
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Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
|
66.20
|
64.50 |
UK Pound
|
87.50
|
84.65 |
Euro
|
78.25
|
75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
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